San Diego Without question, nerds boost the local economy. But so do smerfs. Indeed, San Diego should post a sign on the outskirts: "Smerfs Welcome." Smerfs are notorious cheapskates, but their dollars are green. In the tourist industry, "smerf" is an acronym standing for "social, military, educational, religious, and fraternal" organizations. Normally, their members pay their own way to a meeting or convention. "These visitors typically pack four travelers in a hotel room and don't have corporate credit cards to blow on expensive meals," says Forbes magazine.
Many hoteliers count government employees among smerfs. "Governments have per diem rates that are published," says Peter Shure of Conferon Global Services, Twinsburg, Ohio. "So most hotels, knowing what the government employees can spend, have special government rates."
National political conventions are also increasingly lumped with smerfs. Republican delegates used to be considered big spenders, but no more. Increasingly, they are brown baggers. Last year, New York City's Economic Development Corporation figured the Republican convention was a big winner, but the city's comptroller, using different statistical models, said it cost the city a bundle.
With the big-spending convention-and-meetings business getting intensely competitive, San Diego cannot look down its nose at smerfs. San Diego dodged a bullet this year but long-term faces the prospect of the shutdown of military installations. If that happens, it may be a good idea to rescue some lodging units from the wrecking ball so they can be used to capture the lowest-budget smerf markets, such as scout troops, cheerleaders, impecunious poets, and regiment reunion attendees.
Activist John McNab unsuccessfully battled the teardown of lodging units at the old Naval Training Center, now a housing development. "The real estate industry is drooling, knocking off properties one by one," he says. Long range, developers are eyeing such properties as North Island (the Naval Air Station and Naval Amphibious Base) and the Marine Corps Recruit Depot. McNab intends to fight and hopes that lodging units can be used for low-cost smerf accommodation. Planning specialists say such an idea is workable if there are other amenities, such as food service.
Smerfs have their peculiarities, of course. The trade publication Association Meetings warns host hotels that members of fraternal organizations might want to bring their own booze. A gospel group "brings along a ten-dollar bill and the Ten Commandments, fully intending not to break either," says the publication. Back in the 1980s, when Brigham Young University's teams regularly played in the Holiday Bowl, the coach, now-retired LaVelle Edwards, made the same observation in almost identical words. It wasn't funny to San Diego hotels, restaurants, and bars.
But don't sniff at smerfs. "A corporate meeting may bring 1000 people, while a smerf meeting brings 100,000 and has more impact on the local economy," says E.J. Siwek, who writes on conventions and meetings from Bethel, Connecticut. He points out that smerfs will hold their meetings on weekends, while corporations prefer Monday through Friday. Thus, smerfs can keep hotels full.
That doesn't help here. "Weekends are the busiest in San Diego," says La Jolla tourism expert Jerry Morrison. "It depends on the market. Downtown Dallas is empty on weekends, unless there is a big convention there."
Some smerfs do spend big. "We've found that 30 percent of the smerf market can afford high-priced hotels," says Walter Barnard, publisher of Smerf Meetings Journal, Irvington, New York. Focus on the Family, a politically potent, fundamentalist religious group based in Colorado Springs, schedules meetings in $200-a-night hotels, Barnard notes. On the other hand, "I doubt that an association of Texas Baptist ministers will schedule a meeting in the [Manchester Grand] Hyatt in San Diego."
However, "The flip side is that a lot of smerf planners plan family trips around meetings. If they are among the 30 percent, they may stay in downtown San Diego and go up to Disneyland. But it's a weird market. If a group is determined to go to New Orleans, it will go in August, which is the worst time of the year to go to New Orleans," says Barnard. With convention centers overbuilt and the convention business stagnating, the cost-conscious smerfs are offered better deals than ever by cities with gleaming-but-empty convention halls. Smerfs will be a higher share of the market for places like Shreveport, Galveston, and Tulsa, he says.
The smerf business is "immune to downtimes," he says. After 9/11, corporate travel and the convention/meetings business collapsed. But smerfs remained a robust market, suddenly courted by cities that once had snubbed them.
In 2003, occupancies by smerfs were 5 percent of San Diego's total of 12.8 million hotel room nights, says Skip Hull, vice president of CIC Research, Inc., San Diego. How much do smerfs spend? It's a fraction of the direct delegate spending at the glitzy events: $1049 per delegate at a convention-only meeting; $1338 at a convention/trade show; and $1627 for a trade show only. These San Diego spending totals are higher than national figures.
Jack Giacomini, vice president and managing director of the Red Lion Hanalei and Hilton San Diego Mission Valley, estimates that smerfs spend 40 percent of what the "highest ticket" delegates spend. So 40 percent of $1627 is not bad. Hull agrees that 40 percent of the top ticket is about right. "The beauty of it is if they need to transact business, what better place is there than San Diego, with all its leisure options?" says Giacomini. He has regular marketers assigned to recruiting smerfs. The Red Lion Hanalei gets about 25 percent of its business from smerfs and the Hilton San Diego Mission Valley 15 percent.
"Spring and fall are the prime times for business travel, conventions, and meetings," says Giacomini. Smerfs fill in the gaps in winter and summer. Mission Valley, Mission Bay, and Harbor Island are the most popular smerf locations. Sal Giametta of the Convention and Visitors Bureau says the small and medium-sized hotels and motels get a big chunk of the smerf business. Both Morrison and Robert Rauch, director of San Diego State University's Center for Hospitality and Tourism Research, believe downtown, with its $200-plus nightly prices, may have priced itself out of much of the smerf market.